Conclusion of Outsourcing

This topics shows that India is the power house in the IT services and it provides services to USA, UK, China and etc. Many skilled labour of India are very much demanded by the developed countries. In India imports of business services as a percentage of GDP is highest in other countries (UK, USA and China). India buys more business services than other developed countries. India faced many constraints but now also India is the largest outsourcing.

Major constraints faced by India

Moments jobs from one country to other country
This graph shows that the foreign countries jobs are moving to India.In 2004 many states of US introduced anti-outsourcing bills but none of bills could be passed. The basic question which is raised in India and other developing countries is: where as the advocates of globalization always told about the removal of all barriers to trade in goods and services but when ever their interest appears to be affected by global competition, they protect their interest either through heavy subsidies or they create any other barriers such as labour standards, pattern rights etc. In other words nationalism takes over globalization. The anti-outsourcing law always goes against the goals of WTO(World Trade Organisation) and globalization.

Top oursourcing countries

India is the leading outsourcing country. The US and European countries are the largest customer for Indian outsourcing industry (specially IT & BPO) and accounts for 60% and 30% of IT and BPO exports. India exports software to 95 counties in the world. 82% of US companies first choice for software outsourcing is only India. Indian-American ran more than 750 companies in America's silicon value. Now India is one of the world's 10 fastest growing economic.

Top 10 outsourcing companies:
  1. 1. Affiliated of Computer Services
  2. Satyam(SAY)
  3. Cognizant
  4. Perot Systems
  5. Infosys(INFY)
  6. Patni(PTI)
  7. TATA Consulting Services
  8. HCL
  9. GenPact
  10. Mellon

(Source: SourcingMag)

These are the top 10 outsourcing companies in which 5 companies belongs to India. It shows that India is the no.1 outsourcer.

Future of Outsourcing in India

India's share in global market rose to 55% in 2010 from 51% in 2009. India is still the world favourite outsourcing destination. But India basis many challenges in this outsourcing field such as stiff competition from emerging market (Latin America, Eastern Europ, Asia), high percentage of labour attrition, rising real estate and infrastructure cost. BPO IT sector grow world wide by 10% a year from 140$ billion in 2005 to over 220$ billion by 2010. The industry is rapidly growing and maturing and India has established itself as outsourcing hub. India remains a vital destination for outsourcing expect its annual GDP to grow at 8% to 10% for next decade.

Outsourced Areas

There are some main outsourced areas where outsourcing frequently happens. -

  • Information Technology
  • Network and Telecommunication
  • Human Resources and Insurance administration
  • Accounting, Marketing, Security

India is the largest Outsourcer

Imports of Business Services as a % of G.D.P.
India itself is a large outsourcing business services. As a percentage of out GDP (Gross Domestic Product), India buys more business services then the US, UK and China. After 1996 the imports of business services as a percentage of GDP is increased day by day. This is happened only because of the liberalization, globalization.Many Indians are working in silicon value of USA it shows that India's skilled labours demand is very high in foreign countries. This graph shows the imports of business services as % of GDP in 4 different countries ( India, USA, UK & China). This graph clearly shows that India is the highest importer business services.

Causes of Outsourcing

Many companies are cutting their jobs and moved to India because the availability of skilled English speaking labours for fraction of the wages paid in USA. Finding cheaper labours is a short term fix to help cut their losses and raise their profit, specially at service companies.

The broadening of high speed telecommunication links between India and the USA, the growth of internet-based communication and the reducing cost of computers and communication have also vastly raised the outsourcing trend. Indians to access US computers and for US companies have worked continuously 24hrs per day without the need for overtime paid.

The falling cost and higher reliability of newer communication on system were specially important to shifting of less skilled and relatively lower wage telephone call services jobs from the US to India.

Advanantages of Outsourcing in India

  • Education- Old belief, says that India education is very weak and it is not creative for the students but it is awfully wrong. In fact the students are full of talents, command over quantitative concepts, grip over communication skills as taken India at top of the world specially in out sourcing.

  • Man Power- In India man power is very much skilled both in quantity as well as quality. Indian's are known for their capability, talent and adjustability some times companies outsource to India to get special talent in specific areas.

  • Liberalisation policy of Indian Goverment- Government of India taken some liberal policy for the growth of outsourcing because Indian government is trying to pull lot of FDI(Foreign Direct Investment) into the country.

Introduction of Outsourcing

Outsourcing is also known as BPO(Business Process Outsourcing). It is a recent issue in our economy. Outsourcing happens only when a country producers want to get a job in a foreign country or moments of jobs from a country to foreign country. In India outsourcing is a popular issue because many people in India were going to other foreign country only for jobs. In the It sector outsourcing captured an international dimension many US companies find more profit to contract with the IT software and service in India. The cost for the services in developing countries are less than the developed countries.

India is the second largest English speaking technical resources sector after USA. In IT services India is one stop manpower solutions destination. India buys more business services then the US, UK or China. The US has net surplus from outsourcing other countries with similar surpluses included the UK, India, Singapore, Hong Kong and Switzerland. Many US companies cut a portion of their annual capital cost by reducing the IT department and moving to work in India.

Presently the jobs from USA to India covers a range of professional skills. In addition to IT services such as software maintenance and low level coding. It have expanded to sophisticated IT task such as web application development, XML, software design, architecture and management. In addition IT enables business services such as data entry low level processing, customer call center, telemarketing, collections accounting, human resources procurement and help desks are being outsourced by banks, insurance companies, lenders, credit card companies, airlines and utility providers.

Rough estimate indicates that in recent years 4 lakh to 5 lakh IT jobs for moved out from the USA over the next decade. So the demand for outsourcing work in India will continue to grow as long as it is cost effective and provided high quality of service is maintained. The knowledge based economy, innovation, competition conserve capital, reduce cost, improve quality focus on core and globalization of markets are the main reason for outsourcing.